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Mortgage Broker News | 08 Apr 2013, 12:00 AM Agree 0
A recent CIBC survey showing the average homeowner expects to take an extra two years to pay off mortgage debt is the direct result of unfettered access for unsecured credit, say brokers, renewing calls for government action.
  • Ron Beyer | 08 Apr 2013, 09:17 AM Agree 0
    An easy way for the Federal Government to haul in unsecured credit card debt would be to progressively increase the minimum monthly payment required on these debt instruments. Instead of interest only or 1% minimum monthly payments, phase in 3% minimum monthly payments over a 2 year period (for example a 1/4% increase to the minimum payment every 3 months).

    As people begin to realize the actual cash flow implications to this, they may slow down their excessive use of credit. Arguably some will continue to abuse their credit by using one account to pay the other, but the majority of people will get the message that when you buy on credit, ultimately you need to pay it off.

    And shame on the Banks for showing available credit as part of the clients' net worth on Bank relationship statements given to their clients. It leads the client to a sense of entitlement that this is their money (aka "You are richer than you think").
  • Roy Cocciollo | 08 Apr 2013, 10:50 AM Agree 0
    Truth is credit cards will never be regulated or address because it is directly connected with consumerism. If people don't have credit to spend today, it would have a large impact on the ablity for economic growth. Second it is hugley profitable for banks. Why get 3% return when you can get 20% plus fees. I assure you no one has the will power or discipline to wait 3-5 months to actually save up for something they want or worse yet give up something they have. Freddy Mercury said it best "We want it all and we want now!!"
  • Brent Morgan, Mortgage Mentor | 08 Apr 2013, 11:16 AM Agree 0
    Unsecured debt for Canadians is a huge and growing problem, and that is why we created and launched a new product designed specifically to help Brokers, helps clients reduce their debts, pay less interest, and improve cash flow.
  • JERRY J. ROSE | 08 Apr 2013, 11:35 AM Agree 0
    A responsible government that really cares about consumers could easily remedy the problem by setting a maximum interest rate that lenders could charge on credit cards.IU would suggest a maximum of 10% over bank prime.
    This would ensure that lenders (banks) would be a lot more selective about issuing credit cards and establishing limits on these cards.
  • JERRY J. ROSE | 08 Apr 2013, 11:35 AM Agree 0
    A responsible government that really cares about consumers could easily remedy the problem by setting a maximum interest rate that lenders could charge on credit cards.IU would suggest a maximum of 10% over bank prime.
    This would ensure that lenders (banks) would be a lot more selective about issuing credit cards and establishing limits on these cards.
  • Bryan Jaskolka | 10 Apr 2013, 03:17 AM Agree 0
    The problem with the government stepping in is that the banks would lose more money. I know, who cares, right? I certainly don't either. But they are already "losing" money (meaning that they're still turning a profit, just a smaller one) since the government stepped in to tighten mortgage rules. My concern is, what happens if the government takes away even more of those profits by interfering with credit cards? Will we see more RBC moves where big Canadian banks outsource for cheap labour? Even though I'm not a fan of them, I worry when our banks don't make money.
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